Alpha Natural Resources faces several ongoing environmental lawsuits at its surface mines in Appalachia Environmental groups and state regulators filed five separate lawsuits against the company in 2012 alleging selenium contamination at the company's surface mines. Selenium, a pollutant found in Appalachian coal deposits, has been linked to serious health and environmental impacts.

Selenium compliance settlements and remediation expenditures at Patriot Coal's surface mines (OTC: PCX) indicate that selenium compliance costs can be material Selenium contamination lawsuits against Patriot Coal have resulted in costly settlements and court orders. Between 2007 and 2012, Patriot's asset retirement obligations increased fivefold from USDS134 million to USD743 million. In 2012, after its estimated selenium-related compliance obligations reached USD449 million, Patriot filed for bankruptcy and subsequently committed to phase out its mountaintop removal mining operations.

West Virginia regulatory enforcement data indicates that selenium levels in mine effluent at Alpha's surface mines may be of concern to investors 11 outfalls at Alpha's surface mines in West Virginia received 47 selenium-related violations between 2005 and 2011, compared to 42 outfalls and 207 violations at Patriot's surface mines in the state. Stream and outfall monitoring at Alpha's surface mines between 2005 and 2010 identified 989 instances of selenium levels above federal guidelines, compared to 1951 at Patriot's surface mines.

Improved disclosure by Alpha would enable investors to better understand its selenium-related litigation risks and compliance management strategy Alpha reports selenium monitoring data to West Virginia environmental regulators, but has not disclosed it to investors in its sustainability reporting. Patriot Coal warned investors that "the lack of a known, proven technology to meet selenium effluent limits is an industry-wide issue", making it imperative that Alpha report to investors on its selenium compliance strategy. Additional disclosure by Alpha about its accounting treatment of selenium compliance expenses may be of interest to investors in light of an SEC review that prompted Patriot to restate similar selenium treatment expenses.

Alpha execs sued for fraud, deceiving court to exit bankruptcy and avoid mine cleanup Six former executives at major U.S. coal company Alpha Natural Resources have been sued for fraud by the state of West Virginia, charged with knowingly making false and misleading financial projections in order to finalize Alpha’s plan to get out of bankruptcy. West Virginia’s environment department said the Alpha execs failed to disclose USD 100 million in obligations to restore land at Alpha mining sites in order to make Alpha’s cash flow look better. The USD 100 million in debts and obligations came to light just three months after Alpha got approval to exit bankruptcy and create a new stripped down company called Contura where the Alpha executives quickly took management positions. According to West Virginia’s environment department, “…the debtors’ senior mangement knew about but did not disclose those impending “unaccounted-for” expenditures“ and “…the debtors’ senior management sat on both sides of these very issues and stood to benefit uniquely from consummation of the plan….” The USD 100 million shortfall could threaten Alpha’s viability and could saddle taxpayers with the costs of cleaning up Alpha’s mining sites. Alpha’s executives also wrote into the bankruptcy agreement that they could not be held liable if Alpha goes belly up. Without a bankruptcy agreement that was facilitated by alleged fraud by Alpha execs, the company could have been deemed too financially shaky and instead sold off to pay its reclamation obligations (source corruptionincoal.org).